Broker tips: Babcock, Ophir Energy, PZ Cussons

27th Mar 2012 11:47

Peel Hunt has maintained its positive rating for engineering support services group Babcock after an in-line pre-close trading update this morning."With an acceleration in organic growth to come as the pipeline continues to convert, the potential for increased merger synergies and deleverage continuing at pace, in our opinion Babcock should be re-rated further," said analyst Christopher Bamberry.Peel Hunt has reiterated a buy recommendation and 855p target price for the stock.Nomura has raised its target price for oil and gas group Ophir Energy from 525p to 667p and retained a buy rating on the stock following yesterday's announcement of a record gas discovery in Tanzania."The 3.4 TCF of recoverable gas proved by Jodari takes discovered gas across Blocks 1,3 and 4 in Tanzania to 7 TCF, and much closer to the 10 TCF of gas required for two trains of LNG," Nomura said."We think that the market will now move to fully derisk a two train LNG development on the back of this news and apply an M&A read-across valuation from the Cove sale process in Mozambique."Jefferies has maintained its negative stance on cosmetic production group PZ Cussons following the group's profit warning this morning."Being the second profit warning since November, we expect pressure on the shares, which are trading at the princely valuation of 20.5x calendarised FY-12 PE," Jefferies said. This is a 20% premium to sector peer Unilever.Jefferies retains its underperform rating and 260p target price for PZ Cussons.BC